The Next Generation of B2B Purchasing: Millennials, Marketplaces and Digital Buying Preferences - Oracle
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The Next Generation
of B2B Purchasing:
Millennials, Marketplaces and Digital
Buying Preferences
How age groups and evolving channel
adoption are redefining B2B sales
A Custom Report
Introduction
B2B salespeople continue to use traditional
methods of selling, such as engaging “Sellers need to upgrade
buyers via phone calls or even face to
digitally as per the situation
face. But time has become a constraint
for buyers, and new digital purchasing
in the market. The market has
channels have emerged to speed up the become hyper demanding and
buying process. In this report, we explore the seller needs to increase
the B2B buyer demand for those digital their profitability to remain
channels versus traditional channels.
competitive… Digitization is the
Buyers acknowledge the “amazing best way they can achieve it.”
experiences” sellers can provide
Pizarro Olivos, Manager,
using digital platforms, which provide
Procurement & Business
greater availability of more products,
Administration at
easier management of operations and
Hipermercados Jumbo
relationships, and successful on-time
product delivery. Digital channels,
including marketplaces, have emerged
as the clear, transformative favorites
among the youngest buyers in the Table of Contents
workforce—Millennials, born from 1977
Introduction....................................................... 3
to 1995—and as a popular choice among
other age groups as well. About the Study .............................................. 5
Segmentation by Age Group........................ 7
The Gap Between B2B Buyer Needs
and Sales Experiences.................................... 8
“Organizations like Amazon
Recognizing Buyer Experience Needs in
have created an efficient Digital Channels.............................................15
strategy where they have built Age Groups Prioritize Needs and
their organization around the Digital Benefits...............................................17
customer. Most build their B2B Digital Purchasing Summary
organization around a product.” By Age Group ..................................................19
Summary..........................................................21
Brian Carlson, Director, Indirect
Sourcing & Procurement at Conclusion........................................................22
Target Corporation About the Authors.........................................23
Appendix...........................................................24
2
Now, a majority of buyers in all age groups to 1976—have unique preferences emerging
are prioritizing digital channels for greater from their use of digital environments as well.
flexibility and personalization, as well as
capabilities that help them manage the Mirakl and Oracle partnered with the B2B
full life cycle of the buying process. This Online research team to conduct a study of 200
includes marketplaces, which facilitate their global B2B buyers across verticals. We studied
own transparent, all-access ecommerce not only their behavior, but their differences
sales and services. This digital paradigm is a in attitudes across three generations—Baby
stark contrast to the one-on-one, negotiated Boomers, Gen-X, and Millennials—and between
terms found in traditional B2B sales. As those that prefer RFPs and those that do not.
buyers increasingly demand more options,
pricing transparency, and greater flexibility,
B2B sellers are transitioning online.
Key insights include:
The urgency for this model is clear given
the evolving habits of a new generation of Millennials (31%) are the most likely to
buyers. In their World Online Population
prefer marketplaces, more than either
Forecast, 2017 to 2022 (Global),1 Forrester
reports that by 2020, 46% of adults will be Gen-X (29%) or Baby Boomers (19%).
Millennials. This age group approaches
buying with different attitudes and priorities,
driving B2B sellers to transform the way 73% of buyers generally use digital
they engage with all customers. Favoring channels. Most prioritize pre-ordering
transparent, more competitive models over and back-ordering (72%), personalized
negotiations in one-to-one interactions, this product recommendations (65%), and
growing population will soon dictate the
scheduling (63%), among other benefits.
terms by which B2B products are sold.
The preferences of seasoned professionals
are changing in this new environment as In each age group, approximately 70% of
well. Those buyers who have long preferred buyers value the fewer negotiations and
the RFP or tender process are now adopting improved sales processes associated
digital environments at a universal scale. The
with marketplaces.
Baby Boomer age group—born from 1946 to
1964—and Gen-X age group—born from 1965
3About the Study
Mirakl, Oracle, and B2B Online surveyed
200 B2B buyers across Latin America,
Europe, and North America. Respondents “With Amazon Business rapidly
represent only private companies with more expanding into B2B distribution,
than $500 million in annual revenue. The
majority of B2B buyers do business with
food service distribution stands
both manufacturers (86%) and distributors out as a likely target. Amazon has
(90%). Each respondent is directly involved already invested heavily in the food
in their company’s buying processes and
represents one of the three age groups and grocery category in B2C, and
measured in the study. success in B2B food distribution
Respondents represent companies from is an equally large opportunity…
a wide range of industries. They bring Industry fragmentation will heavily
their own unique perspectives from each
B2B sales environment. The vast majority
favor its success.”
identify as procurement, purchasing, or Ryan Curtis, North American Regional
sourcing professionals. Lead Category Buyer – Strategic
Procurement at Gordon Food Service
*See Appendix A for the complete data.
What is your role?
Procurement / Purchasing / Sourcing
76%
Department Buyer (General)
11%
Category Management
6%
Office Management
4%
Supply Chain
2%
Facility/Facilities Management
1%
4Segmentation by
Age Group
The emphasis of this study is on buyer habits Age groups now play a key role in how
as they relate to generational preferences. The manufacturers and distributors engage buyers.
study focused on respondents across three Some respondents claim Millennials now make
different age groups: up the majority of their customer base. Those
sellers using marketplaces are leveraging
What is your age group? Millennials’ digital savvy and desire for a
variety of options to earn their loyalty. In B2C
Millennials, sales, younger consumers turn to Amazon
31%
born from 1977 first when researching and buying products—
to 1995, who something B2B sellers hope to recreate in their
make up 31% of own sales environment.
respondents;
But as we will find, digital transformation in
Gen-X, born B2B sales addresses broader appeal among
40%
from 1965 buyers. Buyers entrenched in the RFP or
to 1976, who tender process and those generally interested
make up 40% of in more efficiency, better customer service,
respondents; and a wider variety of products have found
advantages using marketplaces as well.
and Baby
Boomers,
29% born from 1946
to 1964, who
make up 29% of
respondents.
5The Gap Between B2B
Buyer Needs and Sales
Experiences
The B2B sales environment is growing
more competitive as manufacturers and
distributors struggle to provide buyers with the “Ever since ecommerce
experiences they demand. Buyers want a mix giants emerged on the B2B
of channels to purchase from. Those that start
competitive landscape…[the]
their searches online may choose to engage
sellers through traditional channels, especially majority of buyers are expected
if those sellers are yet to provide their own to make half or more of their
digital channels.
work purchases online. This
The availability of both digital and person-to- trend will likely grow as more
person channels provides more opportunities
for buyers. Those sellers that depend heavily purchasers find that procuring
on a single channel will lose opportunities to products and services from
competitors.
a website is more convenient
The result is a gap between the existing than buying from a sales
experiences offered by some B2B sellers and
buyers’ purchasing needs. Many suppliers are
representative… It will take time
unaware of digital options available to them, for all suppliers to shift to the
thereby elongating the sales process or turning online sales channel, therefore
away buyers altogether. Our study shows
that practically all buyers that prefer RFPs are creating a gap between the
turning to marketplaces. Millennials, soon to traditional B2B sellers and the
make up the bulk of the buying community,
modern buyers.”
prefer marketplaces above other age groups
as well. Gavin Angell, Development
Director at The Dorchester Group
6Do you feel there is a gap
between the existing experiences
offered by B2B sellers and
your evolving needs for purchasing?
Most respondents (56%) feel there
56% Yes
is a gap between the existing 44% No
experiences offered by B2B sellers
and their evolving needs for
purchasing. Respondents identify
greater needs for digitization and
better ecommerce experiences as
contributors to this gap.
Buyers who acknowledge a gap
cite a lack of flexibility in terms
of minimal purchase orders, for
example, where bulk orders aren’t
always needed. Timely delivery
across regions is a consistent
problem as well. Sellers must adopt
nuanced, more competitive solutions
that support faster, flexible, and
easier experiences for buyers.
7Recognizing B2B Buyer
“Our evolving needs
Experience Needs for purchasing keep
Across Channels changing because the
market is not very stable,
In each case, a majority of respondents generally
buy through all five channels measured. As and we deal in a number
mentioned, the RFP or tender process remains of regions which have
the preferred channel; but 87% of respondents
generally buy through marketplaces, making it
their own demands
the most widely used channel among all others. for products… They
When segmented by age group, the results show
control the purchasing
that Millennials drive this widespread adoption. strategy depending on
As 97% of Millennials generally buy through the demand, leading to a
marketplaces, they are 14% more likely to do so
than Baby Boomers, and 16% more likely than number of risks in order
Gen-X. to make abrupt changes.”
The RFP or tender process is nearly as popular Claire Steenbrink, Senior Buyer –
among all respondents as marketplaces, with Packaging at L’Oréal S.A.
84% of respondents buying through this channel
in general. Just as Millennials drive up the general
use of marketplaces among all buyers, Baby
Boomers generally buy through the RFP or tender
process more often than other age groups. 90%
of Baby Boomers general buy through the RFP
or tender process, making them 16% more likely
than Millennials to do so, and 21% more likely
than Gen-X.
Through which channels do you buy in general?
Marketplaces (platforms like Amazon, Alibaba)
87%
Request for Proposal (RFP) / Tender Process
84%
Digital Channels (e.g. ecommerce, mobile)
73%
eProcurement Systems
71%
Person-to-person (via salespeople, customer service, in-store)
70%
8We can further consider the growing
gap in the context of buyer preferences.
Respondents were asked to select their Flash Finding
one most-preferred channel. Researchers
analyzed the results across all respondents, Over one-quarter of B2B buyers
and then broke down results into both age
group and regions of operation.
(26%) identify marketplaces
as their most preferred
Forty-one percent of all respondents prefer
the RFP or tender process, above all others. purchasing channel, and more
About one-quarter of respondents prefer respondents (87%)—including
marketplaces—now a substantial role in
digital B2B buying—and 11% prefer other 97% of Millennials—buy through
digital channels, including ecommerce marketplaces in general than in
and mobile.
any other channel.
Only 14% of respondents continue to
prefer person-to-person sales, including
salespeople, customer service, or in-store
interactions. Only eleven percent prefer other
digital channels (e.g. ecommerce, mobile),
and only 8% prefer eProcurement systems.
What is your most preferred
purchasing channel?
Request for Proposal (RFP) / Tender Process
41%
Marketplaces (platforms like Amazon, Alibaba)
26%
Person-to-person (via salespeople, customer service, in-store)
14%
Digital Channels (e.g. ecommerce, mobile)
11%
eProcurement Systems
8%
9Differences in Channel Preference by Age Group
In a broad way, age groups are uniform in greatest majority to prefer this channel among
their channel preferences. However, notable age groups, based on the age group ratios in
differences show signs of an evolutionary shift the study. Boomers are 17% more likely than
towards marketplaces and digital channels. Millennials to prefer this channel and 25% more
As Baby Boomers continue to prefer the likely than Gen-X.
RFP or tender process and discourage all
digital channels more than other generations, Millennials (31%) are most likely to prefer
Millennials favor both marketplaces and digital marketplaces, whereas Boomers (19%) are
channels more than the other two age groups the least likely. Specifically, Millennials are
in the study. We will find that all age groups 12% more likely to prefer marketplaces than
prioritize digital channels, each for different Boomers. Gen-X prefers the RFP or tender
reasons. process (31%) and marketplaces (29%) almost
equally. Gen-X is more likely to prefer digital
Researchers found that most Baby Boomers channels (15%) and eProcurement systems
(56%) prefer the RFP or tender process—the (13%) than other age groups.
What is your most preferred
purchasing channel?
Millennials
56%
Gen-X
39%
Baby Boomers
31% 31%
29%
19%
15% 15%
13% 12% 13%
10%
7% 7%
3%
Request for Marketplaces Person-‐to-‐person Digital Channels eProcurement
Proposal (RFP) / (platforms like (via salespeople, (e.g. ecommerce, Systems
Tender Process Amazon, Alibaba) customer service, mobile)
in-‐store)
10Researchers considered other purchasing channel. They are 15%
more likely than those in Europe and 20%
regional differences in more likely than those in Latin America to
their analysis of evolving prefer marketplaces as well.
buyer preferences. At 26%, buyers from companies that
The results show that each region operate in Europe are far more likely to
favors specific purchasing channels prefer person-to-person channels than
as well, in some cases much more those in Latin America (4%) or North
than others. America (3%). Latin American buyers are
the most likely to prefer digital channels
At 38%, buyers from companies that
(20%) and the RFP or tender process (52%).
operate in North America are more
likely to prefer marketplaces than any
What is your most preferred
purchasing channel?
52%
North America
Latin America
40%
38%
Europe
34%
26%
23%
20%
17%
14%
11%
7% 7%
4% 3% 4%
Marketplaces Request for Digital Channels eProcurement Person-‐to-‐person
(platforms like Proposal (RFP) / (e.g. ecommerce, Systems (via salespeople,
Amazon, Alibaba) Tender Process mobile) customer service,
in-‐store)
11Recognizing Buyer
Experience Needs
in Digital Channels
73% of buyers generally
use digital channels. “There is a need to innovate
However only 11% claim digital with new concepts and
services in order to make the
is their preferred method to buy, customers satisfied.”
indicating there is a demand for
better digital experiences. In our
study, respondents expressed their
next-gen B2B experience needs: “There is a need [for] more
innovative technology to be
present in order to speed up
“B2B transactions are missing the things and also have accuracy in
digital boost.” operations.”
“We’re in the construction “It’s high time digitization is
business, and we’re very prioritized in these transactions.”
much interested in emerging
technologies such as virtual
reality for better product viewing…
We need the required equipment “We have a high number of
and tools in order to have a clear transactions that are carried out
understanding of the project, and on a daily basis… with modern
[virtual reality] makes it easier to developments, we have to open
make purchasing decisions that our business to alternative
keep [our] business risk free.” payment methods.”
12“Payment methods are most “The virtual reality space has been
important when it comes to better undermined after augmented reality
purchasing decisions, because was launched. But virtual reality
the market is vast and diverse with has more to offer for businesses
different currencies; and when it like us who need to deal with bigger
comes to exchanging capital for purchase decisions…made based
services or products, it does pose a on one product that is shown to us.
challenge at times because of the We have to spend more to view this
currency fluctuations.” product, but this will reduce with the
efficiency of virtual reality.”
“Machine learning will be able to
manage our purchases efficiently. “Mobile apps are playing a major
[It] will be able to keep track of role in business operations because
operations and stocks and make it makes everything quite handy
necessary recommendations on the when it comes to purchasing
next purchase order.” products and services.”
“A very good search engine to make “For our product list, augmented
sure we can find the right solutions reality is the best emerging
and the right products.” technology right now. [Now] we
have all seen how furniture could be
measured [then] virtually placed to see
how it would look… Our purchasing
decisions will be based on the same
experience, too.”
13Age Groups
Prioritize Needs
and Digital Benefits
Despite their growing adoption, digital A majority of respondents believes
channels are yet to support some of the following scenarios are possible
buyers’ unique demands and expectations when purchasing online or through
carried over from traditional sales a marketplace: products requiring
environments. They recognize scenarios additional services on top of physical
in which digital channels do not support goods (51%); products requiring special
certain types of sales. Most respondents handling and approval, such as medical
see issues with sales of products that products, chemicals, or hazardous
have inherent barriers—those that products (55%); or products requiring
wouldn’t be transferable through digital configuration or quoting (60%).
channels in any case.
Scenarios where a majority of respondents
feel purchasing online or through a
marketplace is an option:
Products require additional services on top of physical goods
51%
Products require special handling and approval (e.g. medical products, chemicals, or hazardous products)
55%
Products I’m purchasing require configuration or quoting
60%
14Most respondents believe only inherent barriers
like complex pricing and negotiated terms (67%)
and subscription and licensing requirements “The majority of
(51%) eliminate digital buying channels as
the customer base
options—requirements that may be difficult for
these channels to facilitate. comprises [young and]
These weaknesses bring to mind the
middle-aged people
aforementioned gap between general and who have technology all
preferred purchasing, and that between existing around them and can
and evolving needs for purchasing. Even as
most respondents generally buy through digital comfortably manage
channels, not all of them can be preferred their operations with the
channels if they don’t support all of the products
use of smart phones
buyers need.
[and] mobile apps…
Buyers bring expectations and priorities within
the context of marketplaces and digital channels
Amazon is advancing
as well. As we will find, each age group prioritizes with the necessary
and values those capabilities most aligned with innovations required.”
their existing preferences and pain points.
Cindy Tsang, Vice President, Global
Buyer empowerment is perhaps the greatest Sourcing & Procurement at Four
benefit marketplaces and digital channels bring Seasons Hotels and Resorts
to customers. Customers can rate vendors and
products, select from a wide range of options,
and personalize engagements to improve their
performance. But that ‘empowerment’ means
something different to each type of buyer.
Scenarios where a majority of respondents
feel purchasing online or through a
marketplace is NOT an option:
Products I’m purchasing have complex pricing and negotiated terms
67%
Products require subscriptions and licensing
51%
15B2B Digital Purchasing
Summary By Age Group
The following is a breakdown of what elements each age group prioritizes, values, and demands
within all digital environments. Each age group is represented as follows:
Millennials Gen-X
Millennials (31%) are more likely to prefer Gen-X is more likely to prefer digital channels (e.g.
marketplaces than either Gen-X (29%) or Baby ecommerce, mobile) than the other age groups.
Boomers (19%). They are also most likely to They also prioritize the RFP or tender process
buy through digital channels in general. (31%) and marketplaces (29%) to a similar degree.
In MARKETPLACES, MILLENNIALS In MARKETPLACES, GEN-X
are most likely to: is most likely to:
• Prioritize scheduling orders • Value faster shipping
• Value pricing transparency • Demand better customer service
• Value sales with less negotiation In all DIGITAL CHANNELS,
GEN-X is most likely to:
In all DIGITAL CHANNELS,
MILLENNIALS are most likely to: • Demand seeing only products they can
purchase, or that are specific to their
• Prioritize pre-ordering and back-ordering companies
• Demand live chat with customer service • Prioritize reordering products
• Prioritize mobile purchasing • Prioritize site search and guided navigation
BABY BOOMERS are most likely to:
Baby Boomers
Baby Boomers are the most likely to prefer • Value more options in marketplaces
the RFP or tender process (56%) and the
least likely to prefer marketplaces (19%). • Demand more product assortment in
all digital channels
*See Appendix B for the complete data.
16Summary
Among age groups, Millennials prioritize them find the right products for their
the most benefits found in marketplaces company with the least amount of effort
and all digital environments. They also or friction.
stand in stark contrast to Gen-X in terms
Baby Boomers differ from the two younger
of the types of benefits they prioritize.
age groups in that they prioritize most
While Millennials expect transparency,
benefits to a lesser degree. However, they
flexibility, personalization, and more
are most likely to enjoy greater options
service options, Gen-X most prioritizes
and a wider assortment of products than
convenience: fast shipping, better
the other two age groups.
customer service, and tools that help
17Conclusion
Each generation may differ in terms of how The future will inevitably hold more technological
digital channels appeal to them, but they breakthroughs that change the way B2B sales
all exemplify how these evolving models operate. Buyers and sellers must approach
can succeed with both buyers and sellers. new technologies and channels with caution,
Although digital continues to run alongside ensuring they will successfully fulfill real-market
traditional buying practices, both ends of needs. But as we’ve observed in recent trends,
the sales funnel identify advantages that are digital channels will find a key role from all
not only ‘nice to have,’ but reflective of real angles of analysis— evolutionary, generational,
concerns and changes in the market. and transitional from traditional buying.
Works Cited
1. Forrester Data: World Online Population Forecast, 2017 To 2022 (Global). March 22, 2017.
https://www.forrester.com/report/Forrester+Data+World+Online+Population+Forecast+2017+To+2022+Global/-/E-RES137509
18About the Authors
Mirakl gives companies a fast path to increase customer value by launching an online marketplace.
Marketplaces exceed customer expectations by providing broader selection, at better prices, with
superior service while respecting your Brand DNA. The Mirakl Marketplace Platform is a turn-key SaaS
solution that automates the hard things: Seller onboarding, product data management, service quality
control, and order distribution; on an API-based solution that’s modular and easy to integrate into any
e-commerce platform. Over 150 customers operating marketplaces in 40 countries trust Mirakl’s proven
expertise and technology including Urban Outfitters, Hewlett Packard Enterprise, Best Buy Canada,
Carrefour, and Walmart Mexico. For more information: www.mirakl.com
Oracle Commerce Cloud is a fully featured, extensible SaaS commerce solution, delivered in the Oracle
Cloud, supporting B2C and B2B models in a single platform. Oracle Commerce Cloud grants greater agility
and cost savings, with the extensibility and control required in the ultra-competitive digital commerce
market. Find out why leading brands leverage Oracle Commerce Cloud: www.cloud.oracle.com/commerce
B2B Online is the premiere, annual, interactive event for digital and eCommerce executives within the
industry. B2B Online will give you the tools to address key issues you face including, the multigenerational
workforce, digital marketplaces, globalization and localization, tracking ROI on eCommerce investments,
customer experience, omnichannel integration, content management, and mobile and social. To learn
more, visit us at http://b2bmarketing.wbresearch.com
We are a team of writers, researchers, and marketers who are passionate about creating exceptional
custom content. WBR Insights connects solution providers to their targeted communities through
custom research reports, engaged webinars, and other marketing solutions. To learn more, visit us at
www.wbrinsights.com
19Appendix A
In what region is your company located?
32% 45%
North
America Europe
23%
Latin
America
What is your industry?
15% 15% 12% 7% 7% 6%
Retail Manufacturing Consumer Life Sciences Restaurant Financial
Goods / Pharma / Food Services
Services
6% 4% 4% 4% 4% 4%
Construction Distribution Communications Professional Hospitality Energy /
Services Utilities
3% 3% 2% 2% 1% 1%
High Tech Transportation Healthcare Entertainment Education Other
20Appendix B
Assuming you purchase through digital or marketplace channels, what do you
expect to be part of the buying experience?
Ability to pre-order and/or back-order products
79% 74% 63% Millennials
Ability to schedule orders
72% 54% 64%
Ability to live chat with customer service
64% 54% 56%
Gen-X
Products specific to my company / only shown products I can purchase
62% 69% 63%
Pricing specific to my company
59% 60% 59%
Baby Boomers
Ability to re-order products
59% 64% 49%
Ability to purchase on mobile devices
57% 43% 42%
Promotions specific to my company
56% 38% 53%
Ability to pay with different options (PO, Credit Card, Credit)
54% 39% 49%
Expanded product assortment
51% 56% 63%
View product reviews
49% 46% 44%
Site search and guided navigation
34% 39% 36%
Sign up for services related to products
33% 46% 42%
Recommended products
31% 39% 27%
Option to sign up for loyalty program
23% 28% 17%
Does not apply (N/A)
3% 6% 8%
What advantages do marketplaces provide versus traditional selling channels?
More options
83% 86% 96%
Millennials
Pricing transparency
81% 74% 73%
Faster shipping
76% 82% 76%
Gen-X
Less negotiation/improved sales process
73% 72% 69%
Better customer experience
69% 69% 59% Baby Boomers
Lower pricing
61% 49% 47%
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